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For today’s Personal Money Snapshot, we talk to reader N, who lives in an HCOL area and works as an analyst for the federal government, on salary, net worth, debt, and more. “My #1 goal right now is to have a fully funded six-month emergency fund and I’m very close to reaching it.”
We received several requests from readers to start our own “money diary” series. we asked Readers willing to fill out a form with lots of details about debt, spending, savings and more! If you want to fill out the form and be considered for a future personal money snapshotPlease Click here to submit your answer! one can see PDF of questions if you want to review them in advance. see others Personal Money Snapshot series Here.
Please note that this is a real person unlike the usual friendly (blind-skinned, cold-hearted, greedy) blogger who has feelings and doesn’t get anything out of it – so please be gentle in the comments. Thank you! – Floor
Name: N
Location: HCOL area
Age: 29
Job: analyst with the federal government
Income: $65,000
Net worth: With student loan, -42,000$
Net worth when you started working: Technically I started working at 16, but I was 26 when I started working in my post-graduation career. My net worth at the time was -70,000 dollars.
Living situation: renting a studio apartment; living apart from your partner
Debt
What does your debt picture look like?
$81,000 student loan, no credit card debt
I have student loans from going to a private school for my master’s degree. I signed up for PSLF because I work for the government, so my strategy is to pay as little monthly as possible, save the rest and be forgiven.
How much money do you spend each month to pay off your debt?
Thanks to the COVID pause in student loan payments because I signed up for PSLF, I am currently spending nothing to pay off my debt. I will start paying $500 when payments start again.
How did you pay for the school?
My parents generously paid for my bachelor’s degree in a public school. I paid for my master’s degree and living expenses through a combination of savings, student loans, work-training, and paid internships and part-time jobs while in school. At one point I was working more than 40 hours a week while going to school full time, which brought me to the hospital from stress. I quit one of my jobs and spent some more of my savings.
Is it yours or a rental? How much do you pay monthly?
I rent a studio and pay $1,350.
Have you paid off any major debts?
I paid off $6,000 of credit card debt while I was in graduate school and looking for a job after graduation! It was my priority as it had the highest interest rate and I was still in my grace period for the student loans.
Savings, Investments and Retirement
How much do you save each month or year on retirement vehicles like 401Ks, Roth IRAs, and others?
I save $315 a month for retirement: $270 in my 403b and $45 in my Roth IRA. My employer matches $270 on my 403b. I really want to increase my contributions to my Roth and plan to do so when I reach a financial goal this year.
How much money do you spend on other tax-efficient investments/accounts like HSAs, 529s, FSAs, and more?
$75 per month goes to an HSA via business.
How much do you save outside of retirement accounts?
I normally save $1,065 per month including my payment on student loans, but won’t now due to the COVID pause. These fall into several categories: emergency fund, long-term savings, short-term savings, and sinking fund. I do it manually every time I get my paycheck, because I get my paychecks on a different day of the month each month, so automatic transfers don’t really work for me, but I never skip them.
Talk to us about investments. Do you have a financial advisor or planner?
I want to go to a financial advisor one day! I have a diversified 403b that I decided after discussing it with a relative who works in investments whose advice I trust. I also invest $25 per month improvement to understand how it works. My Roth is on a lifecycle backdrop.
Do you have an ultimate goal to save or are you just saving for a bad day?
My #1 goal right now is to have a fully funded six-month emergency fund and I’m very close to reaching it. From now on, I plan to increase my retirement contribution a little and direct more of my savings to general short-term/long-term accounts. My short-term savings goals are travel, cars, dogs, and weddings. My long-term goals are a home down payment and a baby. Even though my partner and I don’t live together, we have similar goals.
When did you really start collecting? How has your savings strategy changed over the years?
I started saving in earnest when I started my first post-graduation job, which I started three months before the outbreak of COVID. While I was fortunate to be able to keep my job from start to finish and work remotely, I realized how dangerous my living conditions were, and since it took me this long to find a job after graduation, I immediately requested a six-month emergency fund. Of course, my strategy has remained fairly stable over the years, although I could have saved much more without the monthly student loan payments.
What’s the #1 thing you do to save money, limit spending, or live frugally?
I monitor my spending very closely and always look for something free to do for fun. If I’m going to spend money, it will be for something worthwhile, like a girls’ trip for a milestone birthday or a much-needed new laptop. I don’t have a TV/cable, I don’t have a car, I walk most places if security permits, and I cook at home 95% of the time.
How much cash do you have available today?
$500 in real cash and $1,400 instantly available online
How much cash do you have that you can use in a week?
$19,000
How much do you have in your “emergency fund” and did you include it in the previous question?
$15,000. I keep most of them in an online bank account that I have immediate access to, and $500-1000 are immediately available online. It is in the previous question.
How much is in your retirement savings?
$17,000
How much is in long-term investments and savings (CDs, index funds, stocks) that isn’t behind the retirement wall?
$5,000 ($3,000 is an inheritance)
Spending
How much do you spend monthly on the following categories?
groceries: 270 dollars
Restaurants, bars, takeaway and delivery: 50$–75$
Clothing and accessories: I don’t buy clothes every month but probably $150 in season or as needed.
Public transport: Work covers my subway commute, and I spend $40 a month on transportation, which I don’t always spend on my personal subway and Ubers.
Rent/living expenses: $1,350 rent
Entertainment: I don’t buy books; I always go to the library. $110 per month for entertainment, dining out, etc. I have an entertainment budget that includes
Other important expenses: All my friends are getting married and my wife and I are saving for a wedding! I’ve been a bridesmaid three times last year, and I’ll be a bridesmaid again this year, with two more weddings on the calendar. I set aside $50 a month for the “wedding season” expenses of the weddings I am/are invited to, but it’s too expensive! I use my office gym for free, but because I love training, I occasionally spend $20 on a ballet class.
Healthcare – premiums and other costs: I have an HDHP so pay $83 a month as a premium plus a few dollars for teeth and vision. (I have glasses and poor eyesight!) I’m lucky to be quite healthy and wanted to take advantage of having an HSA.
What is your spending range for these things? What’s your average?
Holidays – December: I’ve only taken one self-funded vacation since I started working and it cost a total of $1,500 for a week in Europe during peak season. I don’t go on vacation that often! I often go to the beach for a long weekend with my girlfriends or partner and spend maybe $500.
Donation – Average amount of donation or giving: $25 per month to local food bank
Individual clothing items – Average: I’m trying not to buy anything full price but for a new job I had to buy a suit that cost a total of $200 (top and bottom!). I try not to spend more than $30 for a shirt or $50 for a pair of pants, but I can be convinced that it is quality and a piece that I really need.
Apartment or house – Current main residence: $1,350, utilities included
Fill in the blank in this question: I could save _____ if I stopped ______, but I don’t for _______.
I could save $25 a month if I stopped streaming subscriptions, but I don’t because I have no other form of entertainment without a TV! I could save $100 a month if I didn’t go to my friends’ weddings, but I’m not going because my friends’ wedding expectations are reasonable and I love them.
Has inheritance ever played a role in your money situation at any point in your life?
My godfather died suddenly when I was a baby and left me investments of up to $25,000 while I was in college. My grandfather took care of them and let me use the $5,000 while I was studying abroad so I could take trips that my godfather enjoyed doing and that I will never forget. I used $15,000 of this inheritance to cover my living expenses to support my part-time jobs while I was in graduate school, and the rest is still in my investment account.
If so, how has your family provided financial support in your adult life? (Or do you support them?)
My family generously covered my undergraduate education and living expenses. I lived at home for a year while working full time before graduating to save money to move to a HCOL city. When I was looking for a job, I knew I always had a place to come back to and that they would sneak money from me when they visited, but I didn’t like asking them for anything because I wanted to do it on my own.
I’m on the family phone plan and have recently started paying my portion of the plan, though mostly because we all forgot about it when I graduated.
Money Strategy
Do you have a general money strategy?
My money strategy is to split my savings goals into buckets/different accounts and be as disciplined as possible while continuing to enjoy the life I’m currently living. I could probably save more money if I never went out, if I had never seen or seen my long distance friends. [never] I bought new clothes, but I believe life is for living, and as long as I meet my savings goals, I intend to give myself some breathing space in my budget so I don’t go crazy.
What are your favorite resources for personal finance?
Podcasts, blogs and books! i have fun Financial Diet, Money Girland many different books and blogs.
What advice would you give your younger self when it comes to personal finance?
Thinking of saving money as giving your future self the gift of options.
Icons through stencil.
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